IMF Tells British Chancellor of the Exchequer He is "Playing With Fire"

Not fans of austerity

The International Monetary Fund's chief economist has warned George Osborne that he is "playing with fire" with his fiscal policy.

In an interview with Sky News, Olivier Blanchard also said that the Chancellor should have changed his austerity strategy at the Budget last month.

The comments came as the IMF unveiled new forecasts which showed a dramatically weaker outlook for the British economy.

Asked about Britain's prospects, Mr Blanchard said: "I think conditions have deteriorated. There is no question that the fiscal plan - which was designed a few years back - was assuming that private demand would be stronger than it is.